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NZ govt accounts show operating deficit in Sept qtr

Posted in News

Treasury has released the New Zealand Government's accounts for the first three months of the 2008/09 financial year, which show the government falling into an operating deficit of NZ$757 million from a forecast of a NZ$943 million surplus. The main reason for the loss was a NZ$1.1 billion 'mark to market' loss by the New Zealand Superannuation Fund, which had its worst month ever in September with a 7.96% loss. Tax revenues were actually slightly better than forecast. Direct taxes were NZ$164 million better than forecast at NZ$9.964 billion for the first three months, due largely to income taxes being NZ$238 million higher than forecast. This helped offset lower than expected corporate tax revenues.

GST was NZ$153 million higher than expected at NZ$5.456 billion. Resident withholding tax on interest payments was also strong at NZ$703 million, up from a NZ$689 million forecast and up 19.8% from a year ago as interest rates were slightly higher than a year ago and savings grew. The OBEGAL (Operating Balance excluding gains and losses) was actually NZ$500 million greater than forecast at NZ$0.9 billion, largely due to higher than expected tax revenues and spending being marginally lower than expected at NZ$15.066 billion.

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Certainly steepened the government debt

Certainly steepened the government debt curve:

It won't be long before financial institutions can borrow short (RP funding) and lend long for positive carry.

Of course we the punter (saver/depositor) get hit both ways.

Pay higher taxes to cover long end government debt coupon payments and receive less than inflation (as it stands after tax) returns for short end deposits.

And those Australian banks are whingeing about the retail deposit guarantee fees.

What constitutes 'Other borrowings' on

What constitutes 'Other borrowings' on page 26 in the Financial Statements of the Government for the 3 months ending 30 September 2008?: view here:

I have requested this information from the NZDMO many times and failed to get an answer.

I find it astounding there is no way to track the composition of this particular debt component which is the largest category of 'Total borrowings'.

Any help in this quest would be appreciated

Stephen, Send an email/letter to


Send an email/letter to the Finance Minister (shortly to change), your MP, Head of the Finance and Expenditure Select Committee etc......remind them of their fiduciary duties....and the sovereignty of Parliament etc :-)

Stephen, have you used the

Stephen, have you used the Official Information Act to request it? I agree, it's more than one-third of the total borrowings - surely it must be quanitifed. If you have never used the OIA before, let me know as it's important to word your request right so as to avoid them fudging/avoiding the proper answer to what you want to know.

Kate I have had little


I have had little success extracting relevant information from the Finance Minister's office after repeated OIA requests. Much obfuscation and little fact.

My website is littered with copies of my requests and Dr Cullen's responses, about RBNZ activities etc. over the years.

If you feel inclined to help contact me with a PM using the email link at the bottom of the page here: